Third quarter net revenues of $57.1 million,
within guidance.Adjusted diluted earnings per share is $0.18.Cash generated from operations for the third quarter was $5.4 million
and free cash flow was $2.9 million.*
MALVERN, Pa.--(BUSINESS WIRE)--
Vishay Precision Group, Inc. (NYSE: VPG), a leading producer of
precision sensors and systems, today announced its results for its third
quarter of fiscal 2015 and nine months ended September 26, 2015.
Ziv Shoshani, VPG’s chief executive officer said, “I am pleased with our
quarterly results today, considering challenging global economic
conditions. Adjusted diluted earnings per share was $0.18 and cash
generated from operations for the third quarter was $5.4 million, with
free cash flow of $2.9 million. We recorded a $4.9 million pre-tax,
non-cash impairment charge in the quarter, as a result of a current
review of our goodwill and indefinite-lived intangible assets. For the
full year, we have repurchased 618,000 VPG shares at a cost of $8.7
million.”
Net revenues for the third quarter of 2015 were $57.1 million,
representing a $6.3 million, or 9.9%, decrease from $63.4 million of net
revenues for the comparable prior year period. Of the $6.3 million
decrease in revenues, $4.5 million was due to the negative impact of
foreign currency exchange rates. Net revenues for the nine months ended
September 26, 2015 were $173.3 million, representing a $16.5 million, or
8.7% decrease from the $189.8 million of net revenues for the comparable
prior year period. Of the $16.5 million decrease in revenues, $14.0
million was due to the negative impact of foreign currency exchange
rates. Comparing sequential results, net revenues for the third quarter
of 2015 decreased by $2.4 million, or 4.0%, from $59.5 million in the
second quarter of 2015.
Net loss attributable to VPG stockholders for the third quarter of 2015
were $(1.9) million, or $(0.15) per diluted share, compared to net
earnings attributable to VPG stockholders for the third quarter of 2014
of $3.2 million, or $0.23 per diluted share. Foreign currency exchange
rates for the third quarter of 2015 as compared to the prior year period
had a negative impact on net income of $0.7 million, or $0.05 per
diluted share. Net earnings attributable to VPG stockholders for the
nine months ended September 26, 2015 were $0.4 million, or $0.03 per
diluted share, compared to net earnings attributable to VPG stockholders
of $8.0 million, or $0.57 per diluted share for the comparable prior
year period. Foreign currency exchange rates for the nine months of 2015
as compared to the prior year period had a negative impact on net income
of $1.2 million, or $0.08 per diluted share.
Adjusted net earnings attributable to VPG stockholders for the third
quarter of 2015 were $2.4 million, or $0.18 per diluted share, versus
adjusted net earnings attributable to VPG stockholders of $3.3 million,
or $0.24 per diluted share for the comparable prior year period. Net
loss attributable to VPG stockholders for the third quarter of 2015
include $0.5 million of restructuring costs and $4.9 million of
impairment of goodwill and indefinite-lived intangible assets, and
related tax effects and discrete tax items, versus, $0.1 million of
restructuring costs and related tax effects in the third quarter of 2014.
Adjusted net earnings attributable to VPG stockholders for the nine
months ended September 26, 2015 were $5.1 million, or $0.37 per diluted
share, versus adjusted net earnings attributable to VPG stockholders of
$8.4 million, or $0.60 per diluted share for the comparable prior year
period. Net earnings attributable to VPG stockholders for the nine
months ended September 26, 2015 include $0.8 million of restructuring
costs and $4.9 million of impairment of goodwill and indefinite-lived
intangible assets, and related tax effects and discrete tax items,
versus $0.5 million of restructuring costs and related tax effects and
discrete tax items in the nine months of 2014.
Non-cash Impairment Charge
As a result of our regular review of goodwill and indefinite-lived
intangible assets during the quarter, we recorded a $4.9 million
pre-tax, non-cash impairment charge to reduce the carrying value of the
goodwill and indefinite –lived intangible assets related to our steel
business. This charge is preliminary and could change in connection with
our annual review.
Segments
The Foil Technology Products segment revenues were $27.0 million in the
third quarter of 2015, down 1.2% from $27.3 million in the third quarter
last year, and up 3.2% from $26.2 million in the second quarter of 2015.
Net revenues were negatively impacted by the effects of foreign currency
exchange rates by $1.8 million in the third quarter of 2015 as compared
to the third quarter of 2014, and were flat as compared to the second
quarter of 2015. The gross profit margin for the segment increased to
42.0% for the third quarter of 2015 compared to 40.8% in the third
quarter last year, and up from 39.6% in the second quarter of 2015. The
gross profit margin increased from the comparable prior year period
primarily due to manufacturing efficiencies. The sequential gross profit
margin increase was due primarily to volume and manufacturing
efficiencies.
The Force Sensors segment revenues of $14.6 million in the third quarter
of 2015 were down 16.6% compared to $17.5 million in the third quarter
last year, and were down 6.8% from $15.6 million in the second quarter
of 2015. Decreased year-over-year revenues are attributable primarily to
lower volume of $2.2 million and $0.7 million of exchange rate effects.
The decrease in sequential revenues is attributable to lower volume of
$1.1 million. The gross profit margin for the segment was 21.0% in the
third quarter of 2015 versus 22.8% in the third quarter of 2014 and
19.0% in the second quarter of 2015. The gross profit margin for the
quarter decreased from the comparable prior year period primarily due to
the effects of lower volume and the effects of foreign currency exchange
rates, partially offset by cost reduction. Despite lower revenues, the
sequential gross profit margin increased due to production move savings
and lower fixed costs.
The Weighing and Control Systems segment revenues were $15.6 million in
the third quarter of 2015, down 16.3% from $18.6 million in the third
quarter last year, and down 12.1% from $17.7 million in the second
quarter of 2015. Net revenues were negatively impacted by the effects of
foreign currency exchange rates of $2.0 million and volume of $0.9
million in the third quarter of 2015, as compared to the third quarter
of 2014. The sequential decrease is primarily attributable to $1.8
million of lower volume, mainly from our steel products. The gross
profit margin for the segment was 45.4% in the third quarter of 2015
versus 45.9% in the third quarter of 2014 and 43.6% in the second
quarter of 2015. The year-over-year decrease in gross profit margin is
primarily due to the effects of volume and foreign currency exchange
rates. Despite lower revenues, the sequential increase in gross profit
margin is primarily due to favorable product mix in our process weighing
business.
Outlook
Mr. Shoshani concluded, “Assuming a similar exchange rate impact to our
revenues, we expect net revenues in the range of $56 million to $61
million for the fourth quarter of 2015.”
*Editor’s Note: We define adjusted net earnings as net earnings
attributable to VPG stockholders before acquisition purchase accounting
adjustments, restructuring costs, impairment of goodwill and
indefinite-lived intangibles and associated tax effects. Free cash flow
is defined as the amount of cash generated from operations ($5.4 million
for the third quarter of 2015), in excess of our capital expenditures
($2.5 million for the third quarter of 2015) and net of proceeds, if
any, for the sale of assets (none in the third quarter of 2015). ** For
a reconciliation of GAAP to non-GAAP financial information, refer to the
quarterly financial tables.
Conference Call and Webcast
A conference call will be held today (November 3, 2015) 10:00 a.m. EST
(9:00 a.m. CST). To access the conference call, interested parties may
call 1-888-317-6003 or internationally 1-412-317-6061 and use passcode
1369827, or log on to the investor relations page of the VPG website at www.vpgsensors.com.
A replay will be available approximately one hour after the completion
of the call by calling toll-free 1-877-344-7529 or internationally
1-412-317- 0088 and by using the passcode: 10068983. The replay will
also be available on the investor relations page of the VPG website at www.vpgsensors.com
for a limited time.
About VPG
Vishay Precision Group, Inc. (VPG) is an internationally recognized
designer, manufacturer and marketer of: components based on its
resistive foil technology; sensors; and sensor-based systems
specializing in the growing markets of stress, force, weight, pressure,
and current measurements. VPG is a market leader of foil technology
products, providing ongoing technology innovations in precision foil
resistors and foil strain gages, which are the foundation of the
company's force sensors products and its weighing and control systems.
The product portfolio consists of a variety of well-established brand
names recognized for precision and quality in the marketplace. To learn
more, visit VPG at www.vpgsensors.com.
Forward-Looking Statements
From time to time, information provided by us, including but not limited
to statements in this report, or other statements made by or on our
behalf, may contain "forward-looking" information within the meaning of
the Private Securities Litigation Reform Act of 1995. Such statements
involve a number of risks, uncertainties, and contingencies, many of
which are beyond our control, which may cause actual results,
performance, or achievements to differ materially from those anticipated.
Such statements are based on current expectations only, and are subject
to certain risks, uncertainties, and assumptions. Should one or more of
these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from
those anticipated, expected, estimated, or projected. Among the factors
that could cause actual results to materially differ include: general
business and economic conditions, changes in the current pace of
economic recovery, including if such recovery stalls or does not
continue as expected; difficulties or delays in completing acquisitions
and integrating acquired companies; the inability to realize anticipated
synergies and expansion possibilities; difficulties in new product
development; changes in competition and technology in the markets that
we serve and the mix of our products required to address these changes;
changes in foreign currency exchange rates; difficulties in implementing
our ERP system and the associated impact on manufacturing efficiencies
and customer satisfaction; difficulties in implementing our cost
reduction strategies, such as underutilization of production facilities,
labor unrest or legal challenges to our lay-off or termination plans,
operation of redundant facilities due to difficulties in transferring
production to lower-labor-cost countries; and other factors affecting
our operations, markets, products, services, and prices that are set
forth in our Annual Report on Form 10-K for the fiscal year ended
December 31, 2014. We undertake no obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events, or otherwise.
|
|
| VISHAY PRECISION GROUP, INC. |
|
Consolidated Condensed Statements of Operations
|
| (Unaudited - In thousands, except per share amounts) |
|
| |
| |
| | Fiscal quarter ended |
| | September 26, | | September 27, |
| | 2015 | | 2014 |
| | | |
|
|
Net revenues
| | $ | 57,149 | | |
$
|
63,402
| |
Costs of products sold
| |
| 35,699 |
| |
|
39,732
|
|
|
Gross profit
| | | 21,450 | | | |
23,670
| |
|
Gross profit margin
| | | 37.5 | % | | |
37.3
|
%
|
| | | |
|
|
Selling, general, and administrative expenses
| | | 17,760 | | | |
19,647
| |
|
Impairment of goodwill and indefinite-lived intangibles
| | | 4,942 | | | |
—
| |
|
Restructuring costs
| |
| 459 |
| |
|
144
|
|
|
Operating (loss) income
| | | (1,711 | ) | | |
3,879
| |
|
Operating margin
| | | (3.0 | )% | | |
6.1
|
%
|
| | | |
|
|
Other income (expense):
| | | | |
|
Interest expense
| | | (158 | ) | | |
(215
|
)
|
|
Other
| |
| (387 | ) | |
|
123
|
|
|
Other income (expense) - net
| |
| (545 | ) | |
|
(92
|
)
|
| | | |
|
|
(Loss) income before taxes
| | | (2,256 | ) | | |
3,787
| |
| | | |
|
|
Income tax (benefit) expense
| |
| (304 | ) | |
|
523
|
|
| | | |
|
|
Net (loss) earnings
| | | (1,952 | ) | | |
3,264
| |
|
Less: net (loss) earnings attributable to noncontrolling interests
| |
| (9 | ) | |
|
30
|
|
|
Net (loss) earnings attributable to VPG stockholders
| | $ | (1,943 | ) | |
$
|
3,234
|
|
| | | |
|
|
Basic (loss) earnings per share attributable to VPG stockholders
| | $ | (0.15 | ) | |
$
|
0.24
| |
|
Diluted (loss) earnings per share attributable to VPG stockholders
| | $ | (0.15 | ) | |
$
|
0.23
| |
| | | |
|
|
Weighted average shares outstanding - basic
| | | 13,347 | | | |
13,757
| |
|
Weighted average shares outstanding - diluted
| | | 13,347 | | | |
13,977
| |
| | | |
|
|
| |
| |
| VISHAY PRECISION GROUP, INC. |
|
Consolidated Condensed Statements of Operations
|
| (Unaudited - In thousands, except per share amounts) |
| | | |
|
| | Nine fiscal months ended |
| | September 26, | | September 27, |
| | 2015 | | 2014 |
| | | |
|
|
Net revenues
| | $ | 173,265 | | |
$
|
189,804
| |
|
Costs of products sold
| |
| 109,801 |
| |
|
119,515
|
|
|
Gross profit
| | | 63,464 | | | |
70,289
| |
|
Gross profit margin
| | | 36.6 | % | | |
37.0
|
%
|
| | | |
|
|
Selling, general, and administrative expenses
| | | 54,904 | | | |
58,707
| |
|
Impairment of goodwill and indefinite-lived intangibles
| | | 4,942 | | | |
—
| |
|
Restructuring costs
| |
| 841 |
| |
|
475
|
|
|
Operating income
| | | 2,777 | | | |
11,107
| |
|
Operating margin
| | | 1.6 | % | | |
5.9
|
%
|
| | | |
|
|
Other income (expense):
| | | | |
|
Interest expense
| | | (518 | ) | | |
(671
|
)
|
|
Other
| |
| (1,730 | ) | |
|
(560
|
)
|
|
Other income (expense) - net
| |
| (2,248 | ) | |
|
(1,231
|
)
|
| | | |
|
|
Income before taxes
| | | 529 | | | |
9,876
| |
| | | |
|
|
Income tax expense
| |
| 174 |
| |
|
1,800
|
|
| | | |
|
|
Net earnings
| | | 355 | | | |
8,076
| |
|
Less: net (loss) earnings attributable to noncontrolling interests
| |
| (38 | ) | |
|
89
|
|
|
Net earnings attributable to VPG stockholders
| | $ | 393 |
| |
$
|
7,987
|
|
| | | |
|
|
Basic earnings per share attributable to VPG stockholders
| | $ | 0.03 | | |
$
|
0.58
| |
|
Diluted earnings per share attributable to VPG stockholders
| | $ | 0.03 | | |
$
|
0.57
| |
| | | |
|
|
Weighted average shares outstanding - basic
| | | 13,558 | | | |
13,755
| |
|
Weighted average shares outstanding - diluted
| | | 13,772 | | | |
13,968
| |
| | | |
|
|
| |
| |
| VISHAY PRECISION GROUP, INC. | | | | |
|
Consolidated Condensed Balance Sheets
| | | | |
| (In thousands) | | | | |
| | | |
|
| | September 26, | | December 31, |
| | 2015 | | 2014 |
| | (Unaudited) | | |
| Assets | | | | |
|
Current assets:
| | | | |
|
Cash and cash equivalents
| | $ | 63,174 | | |
$
|
79,642
| |
|
Accounts receivable, net
| | | 37,230 | | | |
37,427
| |
|
Inventories:
| | | | |
|
Raw materials
| | | 13,435 | | | |
14,223
| |
|
Work in process
| | | 20,774 | | | |
19,813
| |
|
Finished goods
| |
| 21,689 |
| |
|
18,806
|
|
|
Inventories, net
| | | 55,898 | | | |
52,842
| |
| | | |
|
|
Deferred income taxes
| | | 5,512 | | | |
5,636
| |
|
Prepaid expenses and other current assets
| |
| 10,032 |
| |
|
10,361
|
|
|
Total current assets
| | | 171,846 | | | |
185,908
| |
| | | |
|
|
Property and equipment, at cost:
| | | | |
|
Land
| | | 1,871 | | | |
1,893
| |
|
Buildings and improvements
| | | 50,895 | | | |
49,909
| |
|
Machinery and equipment
| | | 81,519 | | | |
78,500
| |
|
Software
| | | 7,086 | | | |
6,837
| |
|
Construction in progress
| | | 2,605 | | | |
2,928
| |
|
Accumulated depreciation
| |
| (93,983 | ) | |
|
(89,374
|
)
|
|
Property and equipment, net
| | | 49,993 | | | |
50,693
| |
| | | |
|
| Goodwill | | | 6,450 | | | |
12,788
| |
| | | |
|
|
Intangible assets, net
| | | 13,800 | | | |
17,381
| |
| | | |
|
|
Other assets
| |
| 20,931 |
| |
|
20,393
|
|
|
Total assets
| | $ | 263,020 |
| |
$
|
287,163
|
|
| | | |
|
| Liabilities and equity | | | | |
|
Current liabilities:
| | | | |
|
Trade accounts payable
| | $ | 8,140 | | |
$
|
10,559
| |
|
Payroll and related expenses
| | | 13,248 | | | |
14,216
| |
|
Other accrued expenses
| | | 15,665 | | | |
16,902
| |
|
Income taxes
| | | 47 | | | |
2,133
| |
|
Current portion of long-term debt
| |
| 5,870 |
| |
|
5,120
|
|
|
Total current liabilities
| | | 42,970 | | | |
48,930
| |
| | | |
|
|
Long-term debt, less current portion
| | | 13,122 | | | |
17,713
| |
|
Deferred income taxes
| | | 469 | | | |
638
| |
|
Other liabilities
| | | 7,230 | | | |
7,644
| |
|
Accrued pension and other postretirement costs
| |
| 11,899 |
| |
|
12,353
|
|
|
Total liabilities
| |
| 75,690 |
| |
|
87,278
|
|
| | | |
|
|
Commitments and contingencies
| | | | |
| | | |
|
|
Equity:
| | | | |
|
Common stock
| | | 1,276 | | | |
1,273
| |
|
Class B convertible common stock
| | | 103 | | | |
103
| |
| Treasury stock
| | | (8,765 | ) | | |
(32
|
)
|
|
Capital in excess of par value
| | | 190,149 | | | |
189,532
| |
|
Retained earnings
| | | 35,728 | | | |
35,335
| |
|
Accumulated other comprehensive loss
| |
| (31,299 | ) | |
|
(26,560
|
)
|
Total Vishay Precision Group, Inc. stockholders' equity
| | | 187,192 | | | |
199,651
| |
|
Noncontrolling interests
| |
| 138 |
| |
|
234
|
|
|
Total equity
| |
| 187,330 |
| |
|
199,885
|
|
|
Total liabilities and equity
| | $ | 263,020 |
| |
$
|
287,163
|
|
| | | |
|
|
| |
| |
| VISHAY PRECISION GROUP, INC. | | |
|
Consolidated Condensed Statements of Cash Flows
| | |
| (Unaudited - In thousands) | | |
| | | |
|
| | Nine fiscal months ended |
| | September 26, | | September 27, |
| | 2015 | | 2014 |
| | | |
|
| Operating activities | | | | |
|
Net earnings
| | $ | 355 | | |
$
|
8,076
| |
|
Adjustments to reconcile net earnings to net cash provided by (used
in) operating activities:
| | | |
|
Impairment of goodwill and indefinite-lived intangibles
| | | 4,942 | | | |
—
| |
|
Depreciation and amortization
| | | 8,142 | | | |
8,726
| |
|
Loss on disposal of property and equipment
| | | 14 | | | |
61
| |
|
Share-based compensation expense
| | | 796 | | | |
780
| |
|
Inventory write-offs for obsolescence
| | | 1,190 | | | |
972
| |
|
Deferred income taxes
| | | | |
|
Other
| | | 1,276 | | | |
(836
|
)
|
|
Net changes in operating assets and liabilities:
| | | | |
|
Accounts receivable, net
| | | (1,182 | ) | | |
(3,876
|
)
|
|
Inventories, net
| | | (5,159 | ) | | |
(78
|
)
|
|
Prepaid expenses and other current assets
| | | 290 | | | |
(848
|
)
|
|
Trade accounts payable
| | | (2,256 | ) | | |
181
| |
|
Other current liabilities
| |
| (3,104 | ) | |
|
(686
|
)
|
|
Net cash provided by operating activities
| |
| 5,304 |
| |
|
12,472
|
|
| | | |
|
| Investing activities | | | | |
|
Capital expenditures
| | | (7,508 | ) | | |
(5,575
|
)
|
|
Proceeds from sale of property and equipment
| |
| 117 |
| |
|
74
|
|
|
Net cash used in investing activities
| |
| (7,391 | ) | |
|
(5,501
|
)
|
| | | |
|
| Financing activities | | | | |
|
Principal payments on long-term debt and capital leases
| | | (3,839 | ) | | |
(3,105
|
)
|
|
Purchase of treasury stock
| | | (8,733 | ) | | |
—
| |
|
Distributions to noncontrolling interests
| |
| (58 | ) | |
|
(58
|
)
|
|
Excess tax benefit from share-based compensation plan
| | | | |
|
Net cash used in financing activities
| | | (12,630 | ) | | |
(3,163
|
)
|
|
Effect of exchange rate changes on cash and cash equivalents
| |
| (1,751 | ) | |
|
(1,193
|
)
|
|
(Decrease) increase in cash and cash equivalents
| | | (16,468 | ) | | |
2,615
| |
| | | |
|
|
Cash and cash equivalents at beginning of period
| |
| 79,642 |
| |
|
72,809
|
|
|
Cash and cash equivalents at end of period
| | $ | 63,174 |
| |
$
|
75,424
|
|
| | | |
|
|
| |
| |
| |
| |
| VISHAY PRECISION GROUP, INC. |
|
Reconciliation of Consolidated Adjusted Gross Profit Margin
|
| (Unaudited - In thousands) |
| | | | | | | |
|
| | Fiscal quarter ended | | Nine fiscal months ended |
| | September 26, | | September 27, | | September 26, | | September 27, |
| | 2015 | | 2014 | | 2015 | | 2014 |
|
Gross profit
| | $ | 21,450 | | |
$
|
23,670
| | | $ | 63,464 | | |
$
|
70,289
| |
|
Gross profit margin
| | | 37.5 | % | | |
37.3
|
%
| | | 36.6 | % | | |
37.0
|
%
|
| | | | | | | |
|
Reconciling items affecting gross profit
margin | | | | | | | | |
|
Acquisition purchase accounting adjustments (a)
| | | — | | | |
15
| | | | 26 | | | |
56
| |
| |
| |
| |
| |
|
|
Adjusted gross profit
| | $ | 21,450 |
| |
$
|
23,685
|
| | $ | 63,490 |
| |
$
|
70,345
|
|
|
Adjusted gross profit margin
| | | 37.5 | % | | |
37.4
|
%
| | | 36.6 | % | | |
37.1
|
%
|
| | | | | | | |
|
| | | | | | | |
|
| VISHAY PRECISION GROUP, INC. | | | | | | | | |
|
Reconciliation of Adjusted Earnings Per Share
| | | | | | | | |
| (Unaudited - In thousands, except per share data) | | | | | | | | |
| | | | | | | |
|
| | Fiscal quarter ended | | Nine fiscal months ended |
| | September 26, | | September 27, | | September 26, | | September 27, |
| | 2015 | | 2014 | | 2015 | | 2014 |
|
Net (loss) earnings attributable to VPG stockholders
| | $ | (1,943 | ) | |
$
|
3,234
| | | $ | 393 | | |
$
|
7,987
| |
| | | | | | | |
|
Reconciling items affecting operating margin | | | | | | | | |
|
Acquisition purchase accounting adjustments (a)
| | | — | | | |
15
| | | | 26 | | | |
56
| |
|
Impairment of goodwill and indefinite-lived intangibles
| | | 4,942 | | | |
—
| | | | 4,942 | | | |
—
| |
|
Restructuring costs
| | | 459 | | | |
144
| | | | 841 | | | |
475
| |
| | | | | | | |
|
Reconciling items affecting income tax
expense | | | | | | | | |
|
Tax effect of adjustments for purchase accounting, restructuring
costs, impairment charges and discrete tax items
| |
| 1,081 |
| |
|
54
|
| |
| 1,137 |
| |
|
149
|
|
|
Adjusted net earnings attributable to VPG stockholders
| | $ | 2,377 |
| |
$
|
3,339
|
| | $ | 5,065 |
| |
$
|
8,369
|
|
| | | | | | | |
|
|
Weighted average shares outstanding - diluted
| | | 13,347 | | | |
13,977
| | | | 13,772 | | | |
13,968
| |
| | | | | | | |
|
|
Adjusted net earnings per diluted share
| | $ | 0.18 | | |
$
|
0.24
| | | $ | 0.37 | | |
$
|
0.60
| |
| | | | | | | |
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20151103005287/en/
VPG
Wendy Wilson
Senior Director Investor Relations and
Corporate Communications
919-374-5501
[email protected]
Source: VPG